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Crude Oil Price Forecast – crude oil markets continue to build possible base

Crude oil markets have chomped around over the last couple of days, and Friday was more of the same as it looks like we may be trying to form a build a bit of a base. Ultimately, this is a market that has fallen extraordinarily low, and I think we are getting at extremes now.
Christopher Lewis
Crude Oil daily chart, December 31, 2018

WTI Crude Oil

Based upon the gap higher in the choppy action on Friday, I think that the WTI market is trying to form a bit of a bottom, especially considering that the weekly candle stick is a hammer. At this point, I think that if the market rallies from here, we would probably find the $50 level above as resistance. There is a lot of noise just above there extending to the $55 level, so I think that rallies will be hard-fought, but it is possible that we will see the new year bring in bullish pressure as oil has been oversold.

Crude Oil Inventories Video 31.12.18

Brent

Brent markets went back and forth during the trading session on Friday as well, but over here we have a little bit more clear of a signal as there is a specific downtrend line just above. I think that short-term pullbacks are buying opportunities though, at least as long as we can stay above the $50 handle. If we do break down below the $50 level, then it opens the door to the $45 level. A break above that downtrend line could change the entire trend of this market, and I do think that OPEC will try to do something early next year to lift this market. Ultimately, I am still a bit skittish about buying this market but I do see that we are trying to turn the corner.

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